How does one secure a credit card with a bad credit history?


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Credit Card Applications » Research » Guides » Building Credit History » How does one secure a credit card with a bad credit history?

How does one secure a credit card with a bad credit history?

Updated: December 26, 2012

The content is accurate at the time of publication and is subject to change.

Securing a credit card with bad credit, get the credit scores back on track. These secured credit cards are tied to the existing bank accounts and they typically use a portion of the balance in your account as the credit limit. For someone with a low credit score, this could be the only option available to rebuild their credit in an affordable and timely manner. Since the bank account secures your credit, the risk to the lender is considerably low. Secured credit can be obtained irrespective of how bad the credit history has been.

In fact, it is easy to get secured credit, if you have a lot of bad credit information, and yet, it is the best solution to your financial problems. Many people still feel that there are too many negatives in obtaining secured credit, and try to find other alternatives. There are a few drawbacks that you need to be aware of, while applying for secured credit:

  • Finance charges are imposed by many card companies, there are also the interest rates, and other fees as well – all this is being charged on your money.
  • Most card companies do not report to the credit reporting agencies, as a result of this, the credit rating might not go up in spite of you using your card in a responsible manner.
  • They may also mention this as ‘secured credit’ and this will not show dramatic improvements in your credit rating as unsecured credit; which would not work in your favor.

There are also other alternatives to a secured credit. You can always opt for the unsecured credit but this may cost you a bit more and it may be a little difficult to get. The department store credit cards such as the ones offered by JCPenny, Best Buy, Belk, and Sears etc are all unsecured credit cards and are usually much easier to obtain than the normal credit cards. You can apply for these cards in person or online.

There are also unsecured credit cards that are available for those with bad credit history. Here the interest and finance charges are much higher while the credit limit is low. However if the card is used wisely the credit limit may increase.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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